Japan (was Re: All that is solid melts into air

[Peter K.]

>> Or the pension funds?  Actually, does a loss like
>>this have any significant impact?
>>Dennis Breslin
>Depends on whether you consider the Great Depression "significant."
Perhaps
>I exaggerate the potential downside, but the risk that the stock market
>collapse will fuel a downward spiral in consumer sentiment is enormous.
The
>era of Reagan-Clinton was hellbent on recreating the "glory" days of
>unfettered capitalism and was wildly successful at recreating the dynamics
>needed for traditional booms and busts.  Well, we've had our boom.
>Carl

http://www.tnr.com/030501/judis030501.html

John Judis writes "if the Bush administration takes as long to figure out
Japan as the Clinton administration took to figure out the Balkans, we could
have a serious financial crisis on our hands before the year is out."

and

"If Japan's investments in the U.S. slow as a result of its weakening
economy, that could pressure the Federal Reserve to raise interest rates in
order to attract foreign capital--confounding its efforts to keep rates low
to avoid recession at home."

However, elsewhere in the piece he opines that Larry Summers is "one of the
world's best international economists" which makes Judis's judgment suspect
in my opinion.

Peter